The long-awaited audit report on Mozambique’s excessive hidden debt has not – as was broadly anticipated – moved the market. So say African analysts in conversation with GTR. They believe the country’s best course of action is now to repudiate its still unaccounted for debt – a move that will be welcomed by the International Monetary Fund (IMF) and serve to shore up future funds.

The last few months have proven to be an eventful period for the East African nation: at the beginning of June, Italy’s ENI finalised its US$7bn investment in the Coral South floating LNG project – the country’s first offshore development. Lenders on the deal reportedly comprise a host of Asian state-owned banks and export credit agencies, including China’s Sinosure, Korea’s K-sure, China Development Bank, the export-import banks of China and Korea, Bank of China and ICBC, together with 17 commercial banks.

But the success story was quickly overshadowed: later the same month, corporate investigations firm Kroll published an audit report on the Ematum, Proindicus and MAM public companies and their accumulated US$2bn in loans, which they obtained in 2013 and 2014 from Credit Suisse and VTB Capital. US$500mn of these loans is currently unaccounted for – even after the audit – and is rumoured to have gone to weapons (and not to the purchase of fishing and patrol vessels, as originally claimed).

The concealed borrowing was confirmed by the Mozambican government in April last year, causing the IMF and international donors to halt direct budget support: the independent audit was a key condition for talks with the government to resume. But because the report failed to comprehensively explain how all the funds were spent, and without any apportioning of blame, it is not yet clear what the IMF’s next move will be in terms of future support.

The IMF concluded a nine-day staff visit to Mozambique on July 19 “to discuss the results of the audit with the authorities and possible follow-up actions; including working with the authorities to address concerns related to the management of public resources”.

In a press release issued after the visit, Michel Lazare, who led IMF staff on the trip, says: “The team welcomed the publication of the detailed summary of the Kroll audit report by the public prosecutor’s office as an important step towards greater transparency regarding the borrowing undertaken by the Ematum, Proindicus and MAM public companies. However… while the report summary provides useful information on how the loans were contracted and on assets purchased by the companies, critical information gaps remain unaddressed regarding the use of loans proceeds. The team urged the government to take steps to fill the information gaps and to enhance its action plan to strengthen transparency, improve governance, and ensure accountability.”

The team noted some improvements in the Mozambique economy since last year, but Lazare says that the “overall outlook remains challenging”.

While some experts have criticised the lack of transparency in government dealings revealed by the Kroll report, GTR spoke with experts who say the lack of transparency is “nothing new” for Mozambique, and that the country will be able to patch up relations with the IMF and World Bank.

What did the Kroll report find?

Celeste Fauconnier, Africa analyst at Rand Merchant Bank, explains: “Although the information on how the loans were constructed and assets purchased by the companies is thorough, there were inconsistencies on how US$500mn earmarked for the state-owned tuna-fishing company, Ematum, was spent. One government explanation is that those funds were integrated into the national budget and used to purchase military equipment. The Mozambican attorney general’s office acknowledged the situation and said it would work with all stakeholders to resolve the issues.”

Fauconnier tells GTR that other audit findings include:

Credit Suisse and VTB Capital — lead arrangers for the loans — received US$200mn in fees (this finding is being disputed by Credit Suisse).

There is no evidence that any assessment took place before the signing of three government guarantees, highlighting the possibility of a potential conflict of interest.

The companies that borrowed the money are not operational; the audit identified their lack of compliance with contract obligations.

The involved state-owned companies lack some of the basic infrastructure necessary for operations.

Gabriel Buck, managing director of GKB Ventures, tells GTR that “given the secrecy, it’s highly unlikely the Mozambicans will ever get all the facts as to how the money was used, where the funds went, and what the real purpose was”.

Speaking to GTR to clarify its position on the loans, the VTB press office says that the bank did not provide Mozambique with “secret” loans, but that the transactions in question were made in accordance with all applicable laws and approvals, including from the Mozambican Central Bank.

“Moreover, the government of Mozambique confirmed to us that they were following the necessary internal and external legislation and that comprehensive information on the transactions was disclosed to creditors and investors,” it adds.

The bank’s press office also notes that the information on the amount of fees VTB received for arranging the transactions “is misleading”.

“Regarding the loan to MAM, the economics, structure of the transaction, and over-all yield including the fees were in line with market pricing for a large underwritten bilateral financing in Sub-Saharan Africa and similar to the eurobond issued by the republic of Mozambique.”

How can Mozambique effectively deal with this situation?

The only way out of all of this is for the country to repudiate its debt, explains Robert Besseling, executive director of specialist intelligence company EXX Africa. “In other words, it needs to declare the debt to those three state-owned companies unconstitutional, based on the evidence by Kroll. That would allow Mozambique to not have to service those debts, and to prosecute various people in the country who were are the forefront of possible embezzlement. It would also allow the IMF and the World Bank to start with Mozambique on a clean slate,” he tells GTR.

The country’s bondholders, various political influence groups and even the Mozambican Catholic church have been stepping up support for the loans to be declared unconstitutional, and Besseling reckons that it is the most likely outcome. The only stumbling block at this point is political in nature, as the move would implicate the previous government under former President Armando Guebuza, because the loans were granted on the back of guarantees issued while he was in power.

Will this impact infrastructure projects in the country?

Mozambique’s much-lauded gas projects, which will see the country become the world’s third-largest gas exporter, are going ahead: they’re simply too big and too important to fail.

“There’s always been a transparency issue in Mozambique: this [the debt situation] is nothing new. But this wasn’t the biggest reason for infrastructure projects to be cancelled or postponed – it’s more the commodity price factor and the lack of growth – and not specifically just one political event.”

There is a view, however, that any projects or transactions requiring a government guarantee of any nature in the near future will be delayed as a result of demands for higher levels of due diligence.

“This whole issue is going to put those projects back years,” says Buck at GKB Ventures. “It doesn’t stop private sector projects happening, but there will be some contagion – one would be foolish to think there might not be. No one is going to make a decision unless everyone approves – which could mean no decision is made.”

Nevertheless, throughout the debt crisis, none of the current private project negotiations have ceased, and GTR has learned from market sources that the US’ Anadarko onshore portion of the gas projects is moving towards final investment decision in Q2 of next year.

What is the overall economic outlook for Mozambique?

Fauconnier explains that although she expects growth to remain subdued in 2017 due to fiscal constraints and political uncertainty, she anticipates 2018 – and especially 2019 – levels to increase noticeably. This view is driven by various developments, including the country’s growing construction sectors, particularly in roads and bridges infrastructure; the expected increase of coal exports, at competitive prices; and the anticipated release of funding from donors, including the IMF.

“It’s generally looking as if the economy might take a bit of an upturn through the course of this year,” agrees EXX Africa’s Besseling. He believes that although confusion is likely to reign for the next few months, by the end of the year the government will be keen – and able – to show some kind of improvement in its finances (already bolstered by export growth and an improving currency) and real progress on its negotiations with the IMF.

“You’re looking at an economy that’s going to step into the limelight that Qatar has enjoyed for the last 10 to 15 years,” he says. “Or, at least that’s the dream.”

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Privacy Policy

Our privacy commitments

This Privacy Policy outlines the information we may collect about you in relation to your use of our websites, events, related publications and services (“personal data”) and how we may use that personal data. It also outlines the methods by which we and our service providers may (subject to necessary consents) monitor your online behaviour to deliver customised advertisements, marketing materials and other tailored services. This Privacy Policy also tells you how you can verify the accuracy of your personal data and how you can request that we delete or update it.

This Privacy Policy applies to all websites operated by Exporta Publishing & Events Ltd (as indicated on the relevant website).

This privacy statement does not cover the activities of third parties, and you should consult those third-party sites’ privacy policies for information on how your data is used by them.

Any questions regarding this Policy and our privacy practices should be sent by e-mail to privacy@gtreview.com or by writing to Data Protection Officer at, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, United Kingdom. Alternatively, you can telephone our London headquarters at +44 (0) 20 8673 9666.

Who are we?

Established in 2002 and with offices in London and Singapore, Exporta Publishing & Events Ltd is the world’s leading trade and trade finance media company, offering information, news, events and services for companies and individuals involved in global trade.

Our principal business activities are:

Business-to-Business financial publishing. We provide a range of products and services focused on international commodities, export, supply chain and trade finance markets including magazines, newsletters, electronic information and data

Organisers of seminars, conferences, training courses and exhibitions for the finance industry

Exporta Publishing & Events Ltd is a company registered in the United Kingdom with company number 4407327 | VAT Registration: 799 1585 59

Data Protection Policy

This Data Protection Policy explains when and why we collect personal information about people who visit our website, how we use it, the conditions under which we may disclose it to others and how we keep it secure.

Why do we collect information from you?

Our primary goal in collecting personal data from you is to give you an enjoyable customised experience whilst allowing us to provide services and features that will meet your needs.
We collect certain personal data from you, which you give to us when using our Site and/or registering or subscribing for our products and services. However, we also give you the option to access our Sites’ home pages without subscribing or registering or disclosing your personal data.

We also collect certain personal data from other group companies to whom you have given information through their websites (including, by way of example, Exporta Publishing & Events Ltd and subsidiaries, in accordance with the purposes listed below). Should we discover that any such personal data has been delivered to any of the Sites, we will remove that information as soon as possible.

Why this policy exists

This Data Protection Policy ensures Exporta Publishing & Events Ltd:

Complies with data protection law and follow good practice

Protects the rights of staff, customers and partners

Is open about how it stores and processes individuals’ data

pretexts itself from the risk of a data breach

We may change this Policy from time to time so please check this page occasionally to ensure that you’re happy with any changes. By using our website, you’re agreeing to be bound by this Policy.

Data protection law

The Data Protection Act 1998 described how organisations – including Exporta Publishing & Events Ltd – must collect, handle and store personal information. These rules apply regardless of whether data is stored electronically, on paper or on other materials. To comply with the law, personal information collected must be stored safely, not disclosed unlawfully and used fairly.

The Data Protection Act is underpinned by eight important principles. These say that personal data must:

Be processed fairly and lawfully

Be obtained only for specific, lawful purposes

Be adequate, relevant and not excessive

Be accurate and kept up to date

Not be held for any longer than necessary

Processed in accordance with the rights of data subjects

Be protected in appropriate ways

Not be transferred outside the European Economic Area (EEA), unless that country of territory also ensures an adequate level of protection

How do we collect information from you?

We obtain information about you when you use our website, for example, when you contact us about products and services, when you register for an event, register to receive eNewsletters, subscribe or register for a trial to our GTR magazine/website.

Types of Personal Data Held and its Use

1. Customer Services and Administration

On some Sites, Exporta Publishing & Events Ltd collects personal data such as your name, job title, department, company, e-mail, phone, work and/or home address, in order to register you for access to certain content, subscriptions and events. In addition, we may also store information including IP address and page analytics, including information regarding what pages are accessed, by whom and when.

This information is used to administer and deliver to you the products and/or services you have requested, to operate our Sites efficiently and improve our service to you, and to retain records of our business transactions and communications. By using the Sites and submitting personal information through the registration process you are agreeing that we may collect, hold, process and use your information (including personal information) for the purpose of providing you with the Site services and developing our business, which shall include (without limitation) the purposes described in the below paragraphs.

2. Monitoring use of our Sites

Where, as part of our Site services, we enable you to post information or materials on our Site, we may access and monitor any information which you upload or input, including in any password-protected sections. Subject to any necessary consents, we also monitor and/or record the different Sites you visit and actions taken on those Sites, e.g. content viewed or searched for. If you are a registered user (e.g. a subscriber or taking a trial), when you log on, this places a cookie on your machine. This enables your access to content and services that

are not publicly available. Once you are logged on, the actions you take – for example, viewing an article – will be recorded (subject to any necessary consents). We may use technology or a service provider to do this for us. This information may be used for one or more of the following purposes:

to fulfil our obligations to you;

to improve the efficiency, quality and design of our Sites and services;

to see which articles, features and services are most read and used

to track compliance with our terms and conditions of use, e.g. to ensure that you are acting within the scope of your user licence;

for advertising purposes, although the information used for these purposes does not identify you personally. Please see paragraph 5 below for more details;

to protect or comply with our legal rights and obligations; and

to enable our journalists to contact and interact with you online in connection with any content you may post to our Sites.

Please see paragraph 5 below for more information on cookies and similar technologies and a link to a page where you can turn them on or off.

3. Marketing

Some of your personal data collected under paragraphs 1 and 2 above may be used by us to contact you by e-mail, telephone and/or post for sending information or promotional material on our products and/or services and/or those of our other group companies. We give you the opportunity to opt-out of receiving marketing communications. Further detail can be found on the applicable Site and in the footer of each marketing communication sent by us, our group companies or service providers. See also “Consents and opt-outs” section below. We will not share your information with third parties for marketing purposes.

4. Profiling

We may analyse your personal information to create a profile of your interests and preferences so that we can contact you with information relevant to you.

5. Cookies and similar technologies

All our Sites use cookies and similar technical tools to collect information about your access to the Site and the services we provide.

What is a cookie?

When you enter some sites, your computer will be issued with a cookie. Cookies are text files that identify your computer to servers. Cookies in themselves do not identify the individual user, just the computer used.

Many sites do this whenever a user visits their site in order to track traffic flows, recording those areas of the site that have been visited by the computer in question, and for how long.

Users have the opportunity to set their computers to accept all cookies, to notify them when a cookie is issued, or not to receive cookies at any time. Selecting not to receive means that certain personalised services Exporta Publishing & Events Ltd offers cannot then be provided to that user.

Why do we use cookies?

Log In – Where we provide log in mechanisms for site users a cookie is created at login and for the duration of the session. Each cookie contains a unique reference number only (no personal information) which is used to confirm you are authorised.

Analytics – To allow us to keep track of traffic to our website we use cookies. The cookies simply tell us if you have previously visited our website so we can get more accurate figures for New vs Returning visitors.

We may use cookies to:

remember that you have used the Site before; this means we can identify the number of unique visitors we receive to different parts of the Site. This allows us to make sure we have enough capacity for the number of users that we get and make sure that the Site runs fast enough

remember your login session so you can move from one page to another within the Site;

store your preferences or your user name and password so that you do not need to input these details every time you visit the Site;

customise elements of the layout and/or content of the pages of Site for you;

record activity on our Sites so that we understand how you use our Sites enabling us to better tailor our content, services and marketing to your needs;

collect statistical information about how you use the Site so that we can improve the Site; and

gather information about the pages on the Site that you visit, and other information about other websites that you visit, so as to place you in a “market segment”. This information is only collected by reference to the IP address that you are using, but does include information about the county and city you are in, together with the name of your internet service provider.

Most web browsers automatically accept cookies but, if you prefer, you can change your browser to prevent that, or to notify you each time a cookie is set. You can also learn more about cookies in general by visiting www.allaboutcookies.org which includes additional useful information on cookies and how to block cookies using different types of browser. Please note however, that by blocking, deleting or turning off cookies used on the Site you may not be able to take full advantage of the Site.

6. E-mail tracking

E-mail tracking is a method for monitoring the e-mail delivery to those subscribers who have opted-in to receive marketing e-mails from GTR, including GTR Africa, GTR Asia, GTR Americas, GTR Europe, GTR Mena, GTR eNews, Third party e-mails and GTR Ventures.

Why do we track e-mails?

So that we can better understand our users’ needs, we track responses, subscription behaviour and engagement to our e-mails – for example, to see which links are the most popular in newsletters. They enable us to understand the consumers journey through metrics including open rate, click-through rate, bounces and unsubscribes. Any other purposes for which Exporta Publishing & Events Ltd wishes to use your personal data will be notified to you and your personal data will not be used for any such purpose without obtaining your prior consent.

How do you track GTR eNewsletters?

To do this, we use pixel GIFs, also known as “pixel tags” – these are small image files that are placed within the body of our e-mail messages. When that image is downloaded from our web servers, the e-mail is recorded as being opened. By using some form of digitally time-stamped record to reveal the exact time and date that an e-mail was received or opened, as well the IP address of the recipient.

7. Consents and opt-outs

You can give your consent to opt-out of all or any particular uses of your data as indicated above by:

Indicating at the point on the relevant Site where personal data is collected

Informing us by e-mail, post or phone

Updating your preferences on the applicable Site or eNewsletter (unsubscribe and preference options are available in the footer of each eNewsletter)

To turn cookies and similar technologies on and off, see the information in paragraph 5 above.
Any questions regarding consents and opt-outs should be sent by e-mail to privacy@gtreview.com or by writing to Data Protection Officer at, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, United Kingdom. Alternatively, you can telephone our London headquarters at +44 (0) 20 8673 9666.

8. Disclosures

Information collected at one Site may be shared between Exporta Publishing & Events Ltd and other group companies for the purposes listed above.

We may transfer, sell or assign any of the information described in this policy to third parties as a result of a sale, merger, consolidation, change of control, transfer of assets or reorganisation of our business.

9. Public forums, message boards and blogs

Some of our Sites may have a message board, blogs or other facilities for user generated content available and users can participate in these facilities. Any information that is disclosed in these areas becomes public information and you should always be careful when deciding to disclose your personal information.

10. Data outside the EEA

Services on the Internet are accessible globally so collection and transmission of personal data is not always limited to one country. Exporta Publishing & Events Ltd may transfer your personal data, for the above-listed purposes to other third parties, which may be located outside the European Economic Area and/or with a different level of personal data protection. However, when conducting transfers, we take all necessary steps to ensure that your data is treated reasonably, securely and in accordance with this Privacy Statement.

Who has access to your information?

Confidentiality and Security of Your Personal Data

We are committed to keeping the data you provide us secure and will take reasonable precautions to protect your personal data from loss, misuse or alteration.

However, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our Site; any transmission is at your own risk. Once we have received your information, we will use strict procedures and security features described above to try to prevent unauthorised access.

We have implemented information security policies, rules and technical measures to protect the personal data that we have under our control from:

unauthorised access

improper use or disclosure

unauthorised modification

unlawful destruction or accidental loss

All our employees, contractors and data processors (i.e. those who process your personal data on our behalf, for the purposes listed above), who have access to, and are associated with the processing of your personal data, are obliged to keep the information confidential and not use it for any other purpose than to carry out the services they are performing for us.

Responsibilities

Everyone who works for or with Exporta Publishing & Events Ltd has some responsibility for ensuring data is collected, stored and handled appropriately. Each team handling personal data must ensure that it is handled and processed in line with this policy and data protection principles. However, the following people have key areas of responsibility.
The board of directors is ultimately responsible for ensuring that Exporta Publishing & Events Ltd meets its legal obligations.

Name of Data Controller

The Data Controller is Exporta Publishing & Events Ltd. Exporta Publishing & Events Ltd is subject to the UK Data Protection Act 1998 and is registered in the UK with the Information Commissioner`s Office.

How to access, update and erase your personal information

If you wish to know whether we are keeping personal data about you, or if you have an enquiry about our privacy policy or your personal data held by us, in relation to any of the Sites, you can contact the Data Protection Officer via:

Upon request, we will provide you with a readable copy of the personal data which we keep about you. We may require proof of your identity and may charge a small fee (not exceeding the statutory maximum fee that can be charged) to cover administration and postage.

Exporta Publishing & Events Ltd allows you to challenge the data that we hold about you and, where appropriate in accordance with applicable laws, you may have your personal information:

erased

rectified or amended

completed

Disclosing data for other reasons

In certain circumstances, the Data Protection Act allows personal data to be disclosed to law enforcement agencies without the consent of the data subject. Under these circumstances, Exporta Publishing & Events Ltd, will disclose requested data. However, the Data Controller will ensure the request is legitimate, seeking assistance from the board and from the company’s legal advisors where necessary.

Changes to this Privacy Statement

We will occasionally update this Privacy Statement to reflect new legislation or industry practice, group company changes and customer feedback. We encourage you to review this Privacy Statement periodically to be informed of how we are protecting your personal data.

Providing information

Exporta Publishing & Events Ltd aims to ensure that individuals are aware that their data is being processed, and that they understand.

How the data is being used

How to exercise their rights

To this end, the company has a privacy statement, setting out how data relating to individuals is used by the company. This is available on request and available on the company’s website.

Review of this policy

We keep this Policy under regular review. This Privacy Statement was last updated in April 2018.